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Colorado Cannabis Clubs Are Coming – But How Soon?

It’s a familiar conundrum. You’re visiting Denver. You purchase a preroll and a lighter at a legal cannabis shop, and…now what? Your hotel doesn’t allow smoking. It’s illegal to fire up in public. You’re caught in the all-too-common Denver dilemma.

That may soon change. After banning public consumption in its original 2012 legalization law, Colorado city officials and state legislators are now rethinking the policy. Alaska, learning from Colorado, has already written an allowance for public consumption into an early draft of its regulations. In Portland, Oregon, the quasi-legal World Famous Cannabis Cafe has become fully legal under Oregon’s Measure 91. But all movement on the issue isn’t forward. In Washington State the restrictions against consumption in private clubs actually grew stronger over the summer and tied the hands of Seattle officials looking to allow regulated clubs.

Problems with the ban appeared soon after legal cannabis shops opened in Colorado and Washington State. In Denver, police citations for public consumption and display shot up 471 percent. Consumers caught partaking in public faced fines up to $999. The ban had the unintended consequence of driving many inexperienced consumers to edibles, which didn’t work out so well for some. Recognizing a niche opportunity, a handful of entrepreneurs opened consumption clubs in the Denver area earlier this year. Grassroots Break Room, POTUS, and iBake operated on a strictly BYOC basis, but they didn’t last long. Starting on the 4/20 weekend, law enforcement officials began raiding the establishments and shutting them down.

Seattle saw a different kind of problem. A single rogue cop went on a ticket-writing spree and issued 66 of the 83 tickets for public use between January 1 and June 30, 2014. African Americans in Seattle received 33 percent of the tickets despite making up less than 8 percent of the city’s population.

“We’re telling millions of people to come to Colorado and purchase, but then they find it’s not legal to consume it,” said Kayvan Khalatbari, a Denver comedy club promoter. “People are going to consume whether we like it or not. It’s better to make sure it’s done appropriately.”

Reformers in Denver took up the issue earlier this year, gathering enough signatures to put a citywide initiative on the ballot. The Limited Social Cannabis Use proposal would have allowed cannabis use in adults-only bars and clubs within city limits. And it had political muscle — cannabis industry leaders and many of the activists who passed Amendment 64 in 2012, including Marijuana Policy Project communications director Mason Tvert; attorneys Christian Sederberg, Brian Vicente, and Steve Fox; and cannabis entrepreneur Jane West, propelled it toward the Nov. 3 election.

And then suddenly the campaign stopped.

In early September, campaign leaders withdrew the initiative. Signatures weren’t the problem — they had twice as many as they needed. Rather, the surprise move was a political tactic. City officials and the Colorado Restaurant Association were lining up against the measure, but they weren’t averse to a more limited form of public consumption, they just didn’t want it forced on their restaurants. So Tvert & Co. agreed to a time out. The initiative would be put on hold to give Denver officials time to work out a scheme more acceptable to the hospitality industry. Tvert said in September that he hoped for “a law that we know the city would be comfortable with and will not resist and will actually implement.”

Denver Clubs in 2016. Or Else.

Is it such a law actually in the works?

Yes, but it’s not the kind of action the reformers were hoping for. “Since the proponents pulled the ballot initiative, there has not been much movement on the issue,” Carolyn Livingston, communication director for the Colorado Restaurant Association, wrote in an email to Leafly. The City of Denver has indicated it will convene a stakeholder group to discuss the issue in early 2016. “We also anticipate legislation being introduced at the state level in 2016,” Livingston wrote, “although it is too early to tell what the introduced bill will look like.”

“My honest assessment is that we probably won’t have actual laws until the middle of next year,” Denver attorney and legal activist Brian Vicente told Leafly. “It’s going to have to develop community by community. What’s right for Denver may be different than another town.”

“There’s some chatter about activity at the state level,” said Steve Fox, co-founder of the National Cannabis Industry Association. “But our position is that no state licensing scheme is needed. Localities like Denver should handle it themselves.”

While Denver talks, other cities are acting. Nederland, a small mountain town east of Boulder, currently allows a private cannabis club to operate within city limits. Club Ned, located in a house near the center of town, charges a $10 daily membership fee (or $14.20 monthly) and it’s strictly BYOC. Inside there’s a big communal table and usually an experienced and friendly local who’s more than happy to roll your gram into a joint. You can’t buy cannabis there, but Club Ned sells an array of candy and soda. There’s no alcohol — for that you’ve got to walk down the street to one of Nederland’s many bars.

It’s no surprise that Nederland, one of Colorado’s most 420-friendly towns, is one of the first towns to allow a consumption club. But the other pioneer in the space is more unexpected. In October the Denver suburb of Englewood considered a draft ordinance that would allow, regulate, and cap the number of cannabis consumption clubs within the city. City officials there are wrestling with issues including fire safety, intoxication and driving, and the big one: indoor air quality for employees. “In [city] code, it doesn’t necessarily address this type of environment,” Englewood City Council member Steven Yates told Westword recently. “If we’re going to bring the limelight to us, I want it to be a success.”

For the Denver activists, the timeline is clear. If there’s no action by city officials by spring of 2016, they say they’ll revive the initiative and take it directly to the voters.

What Would Legal Cannabis Clubs Look Like?

Some cannabis clubs feel a lot like some of the early MMJ dispensaries. They’re a little shabby and have a doing-the-best-we-can vibe. Visiting Club Ned is a lot like stopping by a mountain cabin for a neighborly visit. The club, owned and run by David and Cheryl Fanelli, isn’t going to make the pages of Architectural Digest. But it’s a notably welcoming venue, and Club Ned members aren’t going to leave without making a few new friends.

The Denver-area clubs (the few that are still open, at least) are similarly funky. When Englewood City Council member Yates visited iBake Englewood, he reported leaving with a contact high. The smoke can get a little thick.

If Englewood and, eventually, Denver get the regulations right, cannabis consumption might move into a clearer, better-lit space. NCIA’s Steve Fox said he’d like to see city regulations that allow cannabis use in a designated area within any bar or restaurant that already has a liquor license.

“People are concerned about exposing teens to this,” said Denver attorney Brian Vicente. “I understand that, even as I’m aware that I can go to a steakhouse and have a martini with the kids next to me. The idea of designating a specific area in a restaurant for consumption seems a little like over-regulation, but I get it. We need to take baby steps at this point.”

Cannabis-infused food may or may not be part of this initial round of rulemaking. “There you’re getting into issues of sale,” said Denver activist and comedy promoter Kayvan Khalatbari. “If there’s a license involved, will it allow for on-site sale, whether it’s an infused food or a single joint? We know about the BYOC model, but that’s not how alcohol works. You can’t bring your own bottle of Jim Beam into a bar.”

In Oregon, that’s exactly how it works. At the World Famous Cannabis Cafe in Portland, private club members (paying a daily $10 fee, like Club Ned) are welcome to bring their own cannabis, share, and consume out of public view. What does “out of public view” mean? Therein lies a legal gray area that so far hasn’t been tested.

Meanwhile, in Washington State, the prospects for cannabis consumption clubs are not nearly so good. In late June the state legislature passed a bill to simplify the state tax structure and loosen restrictions on the local cannabis businesses. Hidden within that bill, though, was a line that outlawed private cannabis clubs statewide. The sneak attack caught many legalization advocates by surprise. Seattle City Attorney Pete Holmes, who sponsored Washington State’s Initiative 502 in 2012, had been preparing to consider regulations to allow private clubs within the city.

Not anymore. “Frankly, it’s a stupid provision and I think that it’s overkill,” Holmes said earlier this year.

Once again, Washington will have to let Colorado — and now Oregon — take the lead.

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